Connacht Tribune - Opinion Piece
False link between local services and house charge non-paymentAugust 8, 2012 - 9:47pm
IT possibly comes as no surprise to many people that the Department of the Environment, Community and Local government would stoop to engage in a propaganda exercise at some point in 2012 to bolster its argument that local services in this country would suffer from a funding crisis, if householders did not pony-up the €160 million in Household Charges.
This propaganda exercise aired in the local media recently, suggests that Galway County Council, among others will be 'forced' by the government to cut funding to a number of local programmes, due to a proportion of householders withholding payment of the charge. This myth needs to be challenged.
It certainly may be the case that the Department is cutting funding to Local Authorities, but for it to state that cuts to services must happen because of the non-payment of all or part of each Council's share of the Household Charge, is completely disingenuous.
Are they really telling us that, for example, housing grants for elderly and disabled people will be suspended? Or that the fire Service, litter control, housing and road maintenance will be affected?
Let's not forget, it is the government which has linked this household charge to the funding of local services.
When one considers how unequal our tax system in this country is, this base propaganda becomes easily transparent. Credit Suisse, (Global Wealth Report - November 2011) reported that financial assets in Ireland make up 47 percent of total assets.
This means that out of €662 billion in total assets, using the latest CSO data, €311 billion is in financial assets and €351 billion is in non-financial assets. After financial liabilities of €194 billion, total net wealth is €468 billion. The wealthiest 1 percent holds €131.5billion in net assets and the wealthiest 5 percent holds €219.3 billion. Not a cent in wealth tax is being paid on these assets.
Every 1 percent tax on the wealthiest 5 percent of people in Ireland would bring in approximately €2 billion p.a. and a 5 percent tax would bring in €10 billion p.a.
In 2010, those earning over €100,000 p.a. earned approximately €20 billion and paid €4.86 billion in income tax, or just 24.3 percent of their gross income.
Because of the massive tax relief enjoyed by high earners, the use of minimum effective tax rates is a sure means of extracting additional tax from high earners.
This would require a scale of minimum effective tax rates on all income ranging from the current level of 30% as incomes exceed thresholds of €100,000, €150,000, €200,000 etc. The minimum effective rates may have to be as high as 60% for those earning above €300,000. There should be no increase in the effective tax rates of those with gross incomes below €100,000 p.a.
Through a combination of increased minimum effective tax rates and higher marginal tax rates, an extra €5 billion p.a. could be collected from those earning above €100,000 p.a.
There is wealth in abundance in this country, but not any political willpower to tap into its obvious potential to fund local services among other things. I suspect this FG⁄Labour government will continue to parade its propaganda in front of us pretending that the country is really broke, and that the burden of local services funding will have to be borne by those already blighted by unemployment, the Universal Social Charge and VAT increases etc.
In addition, the household Charge and the proposed property Tax take no account of whether a householder is unemployed, on a low income or has a high mortgage. Let's open our eyes and not allow this pretence to succeed.